A potential tax-hike by the Indian government could push wealthy Asians offshore and may benefit the UK long-term.

Out of the 1,000 wealthiest individuals in the UK, 62 are of Asian descent and three appear in the top 10, as per the Sunday Times Rich List.

In total, these 62 have a total net worth of £59 billion ($89.9 billion) between them. And despite only making up 6.2% of the list, Asians hold 13% of the £450 billion in total assets.

Most impressively, Asians increased their wealth by an average of 21% last year, compared with the 8.6% average rise in wealth across the Rich List as a whole.

With the notable exceptions of those in the top 10, Asian wealth in the UK appears to be derived from business-to-consumer and business-to-business industries, including the cash and carry, food, hotels and pharmaceuticals businesses.

While it’s difficult to infer much from the data, it's clear Asia’s boom is having notable ripples in the UK economy. In particular, the UK is the beneficiary of its long-standing ties to India, with 87% of Asians in the Rich List of Indian background.

Political rumblings in India may also see their numbers swell. Domestically, despite years of solid economic growth, India’s taxman has struggled to boost tax returns from the growing affluent population.

Just 3% of the country files a tax return of any description and there are only 42,000 top-rate taxpayers across the country.

This jars against some estimates, with Credit Suisse’s Global Wealth Report 2012 suggesting there are as many as 158,000 Indians who would be considered dollar millionaires.

The factors behind the low compliance rate, such as political and administrative laxity, a poorly written tax code, cultural tax avoidance and straightforward corruption, are commonplace in developing economies.

To shore up its tax revenues, the Indian government appears to have set its course for a head-on collision with the current populace of higher rate taxpayers, with a tax hike that could see the top rate of tax (on those who pay it) increase 10% to 40% in what finance minister Palaniappan Chidambaram describes as a “temporary 10% surcharge”.

Top Asians on the RIch List




Source of wealth


Sri and Gopi Hinduja

£10.6 billion

Industry, Finance


Lakshmi Mittal & Family

£10 billion



David and Simon Reuben

£8.3 billion

Property, Internet


Joseph Lau

£4.6 billion



Ravi Ruia

£2.6 billion



Anil Agarwal

£2.2 billion



Lord Paul & Family

£2 billion



Sri Prakash Lohia

£1.9 billion

Textiles, Plastics


Ajay Kalsi & Family

£1.4 billion



Yusuf Hamied

£1.3 billion



Additionally there are moves to target 1.2 million people who have not filed tax returns, which includes individuals who have made large payments to credit cards, purchased or sold a property worth more than $54,829, acquired mutual funds of more than $3,650, received bonds from the Reserve Bank of India of $9,138 or more, or who had made cash deposits of more than $18,276 in a savings account.

However, as this tax avoidance clampdown will inevitably take time, it means the law-abiding few could bear the brunt of the special measures in the short term.

When these measures are taken in combination with a proposed increase in customs duties on luxury cars and yachts, the incentives for India’s most responsible wealth creators are in decline.

If the UK’s Rich List is anything to go by, the West could well be the beneficiary of India’s most recent political developments.